HomeMy WebLinkAboutOrdinance - 2017-O0008 - Tax And Waterworks System Surplus Revenue Certificates Of Obligation - Bond - 01/26/2017Ordinance No. 2017 - 00009
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relating to
CITY OF LUBBOCK, TEXAS
TAX AND WATERWORKS SYSTEM SURPLUS REVENUE
CERTIFICATES OF OBLIGATION,
SERIES 2017
It of
Adopted: January 12, 2017
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TABLE OF CONTENTS
Page
Recitals............................................................................................................................................1
ARTICLE I
DEFINITIONS AND OTHER PRELIMINARY MATTERS
Section1.01. Definitions...............................................................................................................2
Section1.02. Findings...................................................................................................................5
Section 1.03. Table of Contents, Titles, and Headings..................................................................5
Section1.04. Interpretation............................................................................................................5
ARTICLE II
SECURITY FOR THE CERTIFICATES; INTEREST AND SINKING FUND;
PRIOR LIEN OBLIGATIONS
Section 2.01. Payment of the Certificates......................................................................................6
Section 2.02. Interest and Sinking Fund........................................................................................7
(i)
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ARTICLE III
AUTHORIZATION; GENERAL TERMS AND PROVISIONS
REGARDING THE CERTIFICATES
Section3.01.
Authorization...........................................................................................................7
Section 3.02.
Date, Denomination, Maturities, and Interest..........................................................7
Section 3.03.
Medium, Method, and Place of Payment.................................................................8
Section 3.04.
Execution and Registration of Certificates..............................................................9
Section3.05.
Ownership..............................................................................................................10
Section 3.06.
Registration, Transfer, and Exchange....................................................................10
Section3.07.
Cancellation...........................................................................................................11
Section 3.08.
Temporary Certificates..........................................................................................11
Section 3.09.
Replacement Certificates.......................................................................................12
Section 3.10.
Book -Entry -Only System......................................................................................13
Section 3.11.
Successor Securities Depository; Transfer Outside Book -Entry -Only
System....................................................................................................................14
Section 3.12.
Payments to Cede & Co.........................................................................................14
ARTICLE IV
REDEMPTION OF CERTIFICATES BEFORE MATURITY
Section4.01.
Redemption............................................................................................................14
Section 4.02.
Optional Redemption.............................................................................................14
Section 4.03.
Mandatory Sinking Fund Redemption...................................................................15
Section 4.04.
Partial Redemption................................................................................................15
Section 4.05.
Notice of Redemption to Owners..........................................................................15
Section 4.06.
Payment Upon Redemption...................................................................................16
Section 4.07.
Effect of Redemption.............................................................................................16
Section4.08.
Lapse of Payment..................................................................................................17
(i)
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ARTICLE V
PAYING AGENT/REGISTRAR
Section 5.01.
Appointment of Paying Agent/Registrar...............................................................17
Section 5.02.
Qualifications.........................................................................................................17
Section 5.03.
Maintaining Paying Agent/Registrar.....................................................................17
Section5.04.
Termination............................................................................................................17
Section 5.05.
Notice of Change to Owners..................................................................................17
Section 5.06.
Agreement to Perform Duties and Functions........................................................18
Section 5.07.
Delivery of Records to Successor..........................................................................18
ARTICLE VI
FORM OF THE CERTIFICATES
Section 6.01. Form Generally......................................................................................................18
Section 6.02. CUSIP Registration...............................................................................................18
Section6.03. Legal Opinion........................................................................................................19
Section 6.04. Statement of Insurance..........................................................................................19
ARTICLE VII
SALE, CONTROL AND DELIVERY OF CERTIFICATES; DEPOSIT OF PROCEEDS
Section 7.01. Sale of Certificates; Approval of Private Placement Memorandum ......................19
Section 7.02. Control and Delivery of Certificates......................................................................19
Section 7.03. Deposit of Proceeds...............................................................................................20
ARTICLE VIII
INVESTMENTS
Section8.01. Investments............................................................................................................20
Section 8.02. Investment Income.................................................................................................21
ARTICLE IX
PARTICULAR REPRESENTATIONS AND COVENANTS
Section 9.01. Payment of the Certificates....................................................................................21
Section 9.02. Other Representations and Covenants...................................................................21
Section 9.03. Federal Income Tax Exclusion..............................................................................21
Section 9.04. Compliance with the Texas Water Development Board's Rules and
Regulations............................................................................................................. 24
ARTICLE X
DEFAULT AND REMEDIES
Section10.01. Events of Default...................................................................................................25
Section 10.02. Remedies for Default.............................................................................................25
Section 10.03. Remedies Not Exclusive........................................................................................26
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Section 11.01. Discharge .............
ARTICLE XI
DISCHARGE
............................................................................................ 26
ARTICLE XII
CONTINUING DISCLOSURE UNDERTAKING
Section 12.01. Annual Reports......................................................................................................26
Section 12.02. Event Notices.........................................................................................................27
Section 12.03. Identifying Information.........................................................................................28
Section 12.04. Limitations, Disclaimers and Amendments...........................................................28
ARTICLE XIII
AMENDMENTS; ATTORNEY GENERAL MODIFICATION
Section13.01. Amendments..........................................................................................................29
Section 13.02. Attorney General Modification..............................................................................29
ARTICLE XIV
EFFECTIVE IMMEDIATELY
Section 14.01. Effective Immediately . .......................................................................................... 30
Exhibit A - Form of the Certificates........................................................................................... A-1
Exhibit B - Form of Special Escrow Deposit Agreement............................................................B-1
Exhibit C - Description of Annual Disclosure of Financial Information....................................0-1
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AN ORDINANCE PROVIDING FOR THE ISSUANCE OF CITY
OF LUBBOCK, TEXAS, TAX AND WATERWORKS SYSTEM
SURPLUS REVENUE CERTIFICATES OF OBLIGATION,
SERIES 2017; LEVYING A TAX AND PLEDGING SURPLUS
WATERWORKS SYSTEM REVENUES IN PAYMENT
THEREOF; PROVIDING FOR THE AWARD OF THE SALE
THEREOF; AND ENACTING OTHER PROVISIONS
RELATING THERETO
WHEREAS, under the provisions of Subchapter C, Chapter 271, Texas Local
Government Code, as amended, the City of Lubbock, Texas (the "City"), after giving proper
notice, is authorized to issue and sell for cash its certificates of obligation (herein defined as the
"Certificates") that are secured by and payable from the ad valorem taxes and other revenues
specified in Article II of this Ordinance, and that are issued in the amount, for the purposes, and
with the provisions set forth in Section 3.01 of this Ordinance;
WHEREAS, pursuant to a resolution heretofore passed by the City Council, notice of
intention to issue the Certificates was published in a newspaper of general circulation in the City
in accordance with applicable law;
WHEREAS, no petition signed by at least five percent of the qualified electors of the
City has been filed with the City Secretary protesting the issuance of the Certificates;
WHEREAS, no bond proposition to authorize the issuance of bonds for the same purpose
as any of the projects being financed with the proceeds of the Certificates was submitted to the
voters of the City during the preceding three years and failed to be approved;
WHEREAS, the City Council is now authorized and empowered to proceed with the
issuance and sale of the Certificates, and hereby finds and determines that it is necessary and in
the best interests of the City and its citizens that it authorize the issuance of the Certificates in
accordance with the terms and provisions of this Ordinance at this time;
WHEREAS, the Certificates herein authorized for issuance are to be delivered to the
Texas Water Development Board (the "Purchaser") in evidence of a loan commitment received
in the aggregate amount of the Certificates;
WHEREAS, the meeting at which this Ordinance is considered is open to the public as
required by law, and public notice of the time, place, and purpose of said meeting was given as
required by Chapter 551, Texas Government Code, as amended; therefore,
BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF LUBBOCK:
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ARTICLE I
DEFINITIONS AND OTHER PRELIMINARY MATTERS
Section 1.01. Definitions.
Unless otherwise expressly provided or unless the context clearly requires otherwise in
this Ordinance, the following terms shall have the meanings specified below:
"Authorized Officer" means each of the Mayor, the City Manager and the Executive
Director of Finance, acting individually.
"Business Day" means any day other than a Saturday, Sunday or legal holiday or other
day on which banking institutions in the city where the Designated Payment/Transfer Office of
the Paying Agent/Registrar is located are required or authorized by law or executive order to
close.
"Certificate" means any of the Certificates.
"Certificate Date" means the date designated as the initial date of the Certificates by
Section 3.02(a) of this Ordinance.
"Certificates" means the certificates of obligation authorized to be issued by Section 3.01
of this Ordinance.
"City" means the City of Lubbock, Texas.
"Closing Date" means the date of the initial delivery of and payment for the Certificates.
"Code" means the Internal Revenue Code of 1986, as amended by all legislation, if any,
enacted on or before the Issue Date.
"Computation Date" has the meaning stated in Section 1.148-1(b) of the Regulations.
"Designated Payment/Transfer Office" means the Designated Payment/Transfer Office,
as designated in the Paying Agent/Registrar Agreement, or such other location designated by the
Paying Agent/Registrar.
"DTC" means The Depository Trust Company of New York, New York, or any
successor securities depository.
"DTC Participant" means brokers and dealers, banks, trust companies, clearing
corporations and certain other organizations on whose behalf DTC was created to hold securities
to facilitate the clearance and settlement of securities transactions among DTC Participants.
"EMMA" means the Electronic Municipal Market Access System.
"Event of Default" means any event of default as defined in Section 10.01 of this
Ordinance.
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"Fiscal Year" means such fiscal year as shall from time to time be set by the City
Council.
"Gross Proceeds" has the meaning stated in Section 1.148-1(b) of the Regulations.
"Gross Revenues" means, with respect to any period, all income, revenues and receipts
received from the operation and ownership of the System.
"Initial Certificate" means the initial Certificate authorized by Section 3.04 of this
Ordinance.
"Interest and Sinking Fund" means the interest and sinking fund or funds established by
Section 2.02 of this Ordinance.
"Interest Payment Date" means February 15, 2018, and each February 15 and August 15
thereafter, until maturity or prior redemption.
"Investment" has the meaning stated in Section 1.148-1(b) of the Regulations.
"Issue Date" for each series of Certificates or other obligations of the City is the
respective date on which such series of Certificates or other obligations of the City is delivered
against payment therefor.
"MSRB" means the Municipal Securities Rulemaking Board.
"Net Revenues" means the Gross Revenues of the System, with respect to any period,
after deducting the System's Operating and Maintenance Expenses during such period.
"Net Sale Proceeds" has the meaning stated in Section 1.148-1(b) of the Regulations.
"Nonpurpose Investment" has the meaning stated in Section 1.148-1(b) of the
Regulations.
"Operating and Maintenance Expenses" means all reasonable and necessary expenses
directly related and attributable to the operation and maintenance of the System, including, but
not limited to, the costs of insurance, the purchase and carrying of stores, materials, and supplies,
the payment of salaries and labor, and other expenditures reasonably and properly charged, under
generally accepted accounting principles, to the operation and maintenance of the System or by
statute deemed to be a first lien against the Gross Revenues. Depreciation charges on equipment,
machinery, plants and other facilities comprising the System and expenditures classed under
generally accepted accounting principles as capital expenditures shall not be considered as
"Operating and Maintenance Expenses" for purposes of determining "Net Revenues."
"Owner" means the person who is the registered owner of a Certificate or Certificates, as
shown in the Register.
"Paying Agent/Registrar" means The Bank of New York Mellon Trust Company, N.A.,
or any successor thereto as provided in this Ordinance.
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"Prior Lien Obligations" means all bonds or other similar obligations of the City
presently outstanding or that may be hereafter issued, payable in whole or in part from and
secured by a first lien on and pledge of the Net Revenues of the System or by a lien on and
pledge of the Net Revenues subordinate to a first lien on and pledge of the Net Revenues but
superior to the lien on and pledge of the Surplus Revenues made for the Certificates.
"Proceeds" has the meaning stated in Section 1.148-1(b) of the Regulations.
"Project" means the purposes for which the Certificates are issued as set forth in
Section 3.01.
"Purchaser" means the Texas Water Development Board.
"Rebate Amount" has the meaning stated in Section 1.148-3 of the Regulations.
"Record Date" means the close of business on the last day of the calendar month
immediately preceding a maturity date.
"Register" means the Register specified in Section 3.06(a) of this Ordinance.
"Regulations" means the final or temporary Income Tax Regulations applicable to the
Certificates issued pursuant to Sections 141 through 150 of the Code. Any reference to a section
of the Regulations shall also refer to any successor provision to such section hereafter
promulgated by the Internal Revenue Service pursuant to Sections 141 through 150 of the Code
and applicable to the Certificates.
"Representation Letter" means the Blanket Letter of Representations between the City
and DTC.
"Rule" means SEC Rule 15c2-12, as amended from time to time.
"SEC" means the United States Securities and Exchange Commission.
"Special Payment Date" means the Special Payment Date prescribed by Section 3.03(b).
"Special Record Date" means the Special Record Date prescribed by Section 3.03(b).
"Surplus Revenues" means the Net Revenues of the System remaining after payment of
all debt service, reserve and other requirements in connection with the City's Prior Lien
Obligations.
"System" means the City's Waterworks System, being all properties, facilities and plants
currently owned, operated and maintained by the City for the supply, treatment, transmission and
distribution of treated, potable water, together with all future extensions, improvements,
replacements and additions thereto.
"Unclaimed Payments" means money deposited with the Paying Agent/Registrar for the
payment of principal of or interest on the Certificates as the same come due and payable and
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remaining unclaimed by the Owners of such Certificates after the applicable payment or
redemption date.
"Yield of
(i) any Investment shall be computed in accordance with Section 1.148-5 of
the Regulations, and
(ii) the Bonds shall be computed in accordance with Section 1.148-4 of the
Regulations.
Section 1.02. Findings.
The declarations, determinations, and findings declared, made, and found in the preamble
to this Ordinance are hereby adopted, restated, and made a part of the operative provisions
hereof.
Section 1.03. Table of Contents, Titles, and Headings.
The table of contents, titles and headings of the Articles and Sections of this Ordinance
have been inserted for convenience of reference only and are not to be considered a part hereof
and shall not in any way modify or restrict any of the terms or provisions hereof and shall never
be considered or given any effect in construing this Ordinance or any provision hereof or in
ascertaining intent, if any question of intent should arise.
Section 1.04. Interpretation.
(a) Unless the context requires otherwise, words of the masculine gender shall be
construed to include correlative words of the feminine and neuter genders and vice versa, and
words of the singular number shall be construed to include correlative words of the plural
number and vice versa.
(b) Any action required to be taken on a date which is not a Business Day shall be
done on the next succeeding Business Day and have the same effect as if done on the date so
required.
(c) Any duty, responsibility, privilege, power or authority conferred by this
Ordinance upon an officer shall extend to an individual who occupies such office in an interim,
acting or provisional capacity.
(d) This Ordinance and all the terms and provisions hereof shall be liberally
construed to effectuate the purposes set forth herein.
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ARTICLE II
SECURITY FOR THE CERTIFICATES; INTEREST AND SINKING FUND;
PRIOR LIEN OBLIGATIONS
Section 2.01. Payment of the Certificates.
(a) Pursuant to the authority granted by the Texas Constitution and the laws of the
State of Texas, there shall be levied and there is hereby levied for the current year and for each
succeeding year thereafter while any of the Certificates or any interest thereon is outstanding and
unpaid, an ad valorem tax on each one hundred dollars valuation of taxable property within the
City, at a rate sufficient, within the limit prescribed by law, to pay the debt service requirements
of the Certificates, being (i) the interest on the Certificates, and (ii) a sinking fund for their
redemption at maturity or a sinking fund of two percent (2%) per annum (whichever amount is
the greater), when due and payable, full allowance being made for delinquencies and costs of
collection.
(b) The ad valorem tax thus levied shall be assessed and collected each year against
all property appearing on the tax rolls of the City most recently approved in accordance with law,
and the money thus collected shall be deposited as collected to the Interest and Sinking Fund.
(c) Said ad valorem tax, the collections therefrom, and all amounts on deposit in or
required hereby to be deposited to the Interest and Sinking Fund are hereby pledged and
committed irrevocably to the payment of the principal of and interest on the Certificates when
and as due and payable in accordance with their terms and this Ordinance.
(d) The City hereby covenants and agrees that the Surplus Revenues are hereby
irrevocably pledged equally and ratably to the payment of the principal of and interest on the
Certificates. The City reserves the right to issue Prior Lien Obligations for any lawful purpose,
at any time, in one or more installments.
(e) The amount of taxes to be assessed annually for the payment of debt service on
the Certificates shall be determined in the following manner:
(i) The City's annual budget shall reflect (A) the amount of debt service
requirements to become due on the Certificates in the next ensuing Fiscal Year and (B)
the amount on deposit in the Interest and Sinking Fund on the date such budget is
approved.
(ii) The amount required to be provided in the next succeeding Fiscal Year
from ad valorem taxes shall be the amount, if any, that the debt service requirements on
the Certificates to be paid during the next Fiscal Year exceeds the amount then on deposit
in the Interest and Sinking Fund prior to the levy of such ad valorem taxes.
(iii) Following approval of the City's annual budget, the City Council shall, by
ordinance, establish a tax rate that is sufficient to produce taxes in an amount which,
when added to the amount then on deposit in the Interest and Sinking Fund, will be
sufficient to pay debt service on the Certificates when due during the next Fiscal Year.
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(f) If the liens and provisions of this Ordinance shall be released in a manner
permitted by Article XI hereof, then the collection of such ad valorem tax may be suspended or
appropriately reduced, as the facts may permit, and further deposits to the Interest and Sinking
Fund may be suspended or appropriately reduced, as the facts may permit. In determining the
aggregate principal amount of outstanding Certificates, there shall be subtracted the amount of
any Certificates that have been duly called for redemption and for which money has been
deposited with the Paying Agent/Registrar for such redemption.
Section 2.02. Interest and SinkingFund.
und.
(a) The City hereby establishes a special fund or account to be designated the "City
of Lubbock, Texas, Tax and Waterworks System Surplus Revenue Certificates of Obligation,
Series 2017, Interest and Sinking Fund" to be maintained at an official depository bank of the
City separate and apart from all other funds and accounts of the City.
(b) Money on deposit in or required by this Ordinance to be deposited to the Interest
and Sinking Fund shall be used solely for the purpose of paying the interest on and principal of
the Certificates when and as due and payable in accordance with their terms and this Ordinance.
ARTICLE III
AUTHORIZATION; GENERAL TERMS AND PROVISIONS
REGARDING THE CERTIFICATES
Section 3.01. Authorization.
The City's certificates of obligation to be designated "City of Lubbock, Texas, Tax and
Waterworks System Surplus Revenue Certificates of Obligation, Series 2017" (the
"Certificates"), are hereby authorized to be issued and delivered in accordance with the
Constitution and laws of the State of Texas, specifically Subchapter C, Chapter 271, Texas Local
Government Code, as amended, and Article VIII of the City's Home -Rule Charter. The
Certificates shall be issued in the aggregate principal amount of $35,000,000 for the purpose of
paying contractual obligations to be incurred for the following purposes, to wit: (i) construction,
improvements, renovations, relocations and extensions to the City's storm water facilities and
infrastructure, including the Northwest Lubbock Drainage Improvements Project (the "Project");
and (ii) payment of professional services of attorneys, financial advisors, engineers and other
professionals in connection with the Project and the issuance of the Certificates.
Section 3.02. Date, Denomination, Maturities, and Interest.
(a) The Certificates shall be dated the date of their delivery to the Purchaser (the
"Certificate Date"). The Certificates shall be issued in fully registered form, without coupons, in
the denomination of $5,000 or any integral multiple thereof and shall be numbered separately
from one upward, except the Initial Certificate, which shall be numbered T-1.
(b) The Certificates shall mature on February 15 in the years and in the principal
amounts and shall bear interest at the rates set forth in the following schedule:
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Year
2018
2019
2020
2021
2022
2023
2024
2025
2026
2027
2028
2029
2030
2031
2032
2033
2034
2035
2036
2037
Principal Amount ($)
$1,750,000
1,750,000
1,750,000
1,750,000
1,750,000
1,750,000
1,750,000
1,750,000
1,750,000
1,750,000
1,750,000
1,750,000
1,750,000
1,750,000
1,750,000
1,750,000
1,750,000
1,750,000
1,750,000
1,750,000
Interest Rates M
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
(c) Interest shall accrue and be paid on each Certificate respectively until its maturity
or prior redemption, from the later of the Certificate Date or the most recent Interest Payment
Date to which interest has been paid or provided for at the rates per annum for each respective
maturity set forth above. Such interest shall be payable on each Interest Payment Date until
maturity or prior redemption. Interest on the Certificates shall be calculated on the basis of a
three hundred sixty (360) day year composed of twelve (12) months of thirty (30) days each.
Section 3.03. Medium, Method, and Place of Pam
(a) The principal of and interest on the Certificates shall be paid in lawful money of
the United States of America.
(b) Interest on the Certificates shall be payable to the Owners as shown in the
Register at the close of business on the Record Date; provided, however, in the event of
nonpayment of interest on a scheduled Interest Payment Date and for 30 days thereafter, a new
record date for such interest payment (a "Special Record Date") shall be established by the
Paying Agent/Registrar, if and when funds for the payment of such interest have been received
from the City. Notice of the Special Record Date and of the scheduled payment date of the past
due interest (the "Special Payment Date," which shall be fifteen (15) days after the Special
Record Date) shall be sent at least five Business Days prior to the Special Record Date by first-
class United States mail, postage prepaid, to the address of each Owner of a Certificate appearing
on the Register at the close of business on the last Business Day next preceding the date of
mailing of such notice.
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(c) Interest shall be paid by wire transfer to the bank account of such Owner on file
with the Paying Agent/Registrar. At the option of an Owner of at least $1,000,000 principal
amount of the Certificates, interest may be paid by check, dated as of the Interest Payment Date,
and sent United States mail, first class postage prepaid, by the Paying Agent/Registrar to each
Owner, at the address thereof as it appears in the Register, or by such other customary banking
arrangement acceptable to the Paying Agent/Registrar and the Owner; provided, however, that
the Owner shall bear all risk and expense of such other banking arrangement.
(d) The principal of each Certificate shall be paid to the Owner thereof on the due
date, whether at the maturity date or the date of prior redemption thereof, upon presentation and
surrender of such Certificate at the Designated Payment/Transfer Office of the Paying
Agent/Registrar.
(e) If the date for the payment of the principal of or interest on the Certificates shall
be a Saturday, Sunday, legal holiday, or day on which banking institutions in the city where the
Designated Payment/Transfer Office of the Paying Agent/Registrar is located are required or
authorized by law or executive order to close, then the date for such payment shall be the next
succeeding day that is not a Saturday, Sunday, legal holiday, or day on which banking
institutions are required or authorized to close, and payment on such date shall have the same
force and effect as if made on the original date payment was due and no additional interest shall
be due by reason of nonpayment on the date on which such payment is otherwise stated to be due
and payable.
(f) Unclaimed Payments shall be segregated in a special escrow account and held in
trust, uninvested by the Paying Agent/Registrar, for the account of the Owners of the Certificates
to which the Unclaimed Payments pertain. Subject to Title 6 of the Texas Property Code,
Unclaimed Payments remaining unclaimed by the Owners entitled thereto for three (3) years
after the applicable payment or redemption date shall be applied to the next payment on the
Certificates thereafter coming due; to the extent any such moneys remain three (3) years after the
retirement of all outstanding Certificates, such moneys shall be paid to the City to be used for
any lawful purpose. Thereafter, neither the City, the Paying Agent/Registrar, nor any other
person shall be liable or responsible to any Owners of such Certificates for any further payment
of such unclaimed moneys or on account of any such Certificates, subject to Title 6 of the Texas
Property Code.
Section 3.04. Execution and Registration of Certificates.
(a) The Certificates shall be executed on behalf of the City by the Mayor and the City
Secretary, by their manual or facsimile signatures, and the official seal of the City shall be
impressed or placed in facsimile thereon. Such facsimile signatures on the Certificates shall
have the same effect as if each of the Certificates had been signed manually and in person by
each of said officers, and such facsimile seal on the Certificates shall have the same effect as if
the official seal of the City had been manually impressed upon each of the Certificates.
(b) In the event that any officer of the City whose manual or facsimile signature
appears on the Certificates ceases to be such officer before the authentication of such Certificates
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or before the delivery thereof, such manual or facsimile signature nevertheless shall be valid and
sufficient for all purposes as if such officer had remained in such office.
(c) Except as provided below, no Certificate shall be valid or obligatory for any
purpose or be entitled to any security or benefit of this Ordinance unless and until there appears
thereon the Certificate of Paying Agent/Registrar substantially in the form provided herein, duly
authenticated by manual execution by an officer or duly authorized signatory of the Paying
Agent/Registrar. It shall not be required that the same officer or authorized signatory of the
Paying Agent/Registrar sign the Certificate of Paying Agent/Registrar on all of the Certificates.
In lieu of the executed Certificate of Paying Agent/Registrar described above, the Initial
Certificate delivered at the Closing Date shall have attached thereto the Comptroller's
Registration Certificate substantially in the form provided herein, manually executed by the
Comptroller of Public Accounts of the State of Texas, or by his duly authorized agent, which
certificate shall be evidence that the Certificate has been duly approved by the Attorney General
of the State of Texas, that it is a valid and binding obligation of the City, and that it has been
registered by the Comptroller of Public Accounts of the State of Texas.
(d) On the Closing Date, one Initial Certificate of each series reflecting the terms set
forth herein and representing the entire principal amount of all Certificates, payable in stated
installments to the Purchaser, executed by the Mayor and City Secretary of the City by their
manual or facsimile signatures, approved by the Attorney General, and registered and manually
signed by the Comptroller of Public Accounts, will be delivered to the Purchaser. Upon payment
for the Initial Certificate, the Paying Agent/Registrar shall cancel the Initial Certificate and
deliver a single registered, definitive Certificate for each maturity, in the aggregate principal
amount thereof, to DTC on behalf of the Purchaser.
Section 3.05. Ownership.
(a) The City, the Paying Agent/Registrar, and any other person may treat the person
in whose name any Certificate is registered as the absolute owner of such Certificate for the
purpose of making and receiving payment as herein provided (except interest shall be paid to the
person in whose name such Certificate is registered on the Record Date or Special Record Date,
as applicable), and for all other purposes, whether or not such Certificate is overdue, and neither
the City nor the Paying Agent/Registrar shall be bound by any notice or knowledge to the
contrary.
(b) All payments made to the Owner of a Certificate shall be valid and effectual and
shall discharge the liability of the City and the Paying Agent/Registrar upon such Certificate to
the extent of the sums paid.
Section 3.06. Registration, Transfer, and Exchange.
(a) So long as any Certificates remain outstanding, the City shall cause the Paying
Agent/Registrar to keep at the Designated Payment/Transfer Office a register (the "Register") in
which, subject to such reasonable regulations as it may prescribe, the Paying Agent/Registrar
shall provide for the registration and transfer of Certificates in accordance with this Ordinance.
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(b) The ownership of a Certificate may be transferred only upon the presentation and
surrender of the Certificate at the Designated Payment/Transfer Office of the Paying
Agent/Registrar with such endorsement or other evidence of transfer as is acceptable to the
Paying Agent/Registrar. No transfer of any Certificate shall be effective until entered in the
Register.
(c) The Certificates shall be exchangeable upon the presentation and surrender
thereof at the Designated Payment/Transfer Office of the Paying Agent/Registrar for a
Certificate or Certificates of the same series, maturity and interest rate and in a denomination or
denominations of any integral multiple of $5,000, and in an aggregate principal amount equal to
the unpaid principal amount of the Certificates presented for exchange. The Paying
Agent/Registrar is hereby authorized to authenticate and deliver Certificates exchanged for other
Certificates in accordance with this Section.
(d) Each exchange Certificate delivered by the Paying Agent/Registrar in accordance
with this Section shall constitute an original contractual obligation of the City and shall be
entitled to the benefits and security of this Ordinance to the same extent as the Certificate or
Certificates in lieu of which such exchange Certificate is delivered.
(e) No service charge shall be made to the Owner for the initial registration,
subsequent transfer, or exchange for a different denomination of any of the Certificates. The
Paying Agent/Registrar, however, may require the Owner to pay a sum sufficient to cover any
tax or other governmental charge that is authorized to be imposed in connection with the
registration, transfer, or exchange of a Certificate.
(f) Neither the City nor the Paying Agent/Registrar shall be required to issue,
transfer, or exchange any Certificate called for redemption, in whole or in part, where such
redemption is scheduled to occur within forty-five (45) calendar days after the transfer or
exchange date; provided, however, such limitation shall not be applicable to an exchange by the
Owner of the uncalled principal balance of a Certificate.
Section 3.07. Cancellation.
All Certificates paid or redeemed before scheduled maturity in accordance with this
Ordinance, and all Certificates in lieu of which exchange Certificates or replacement Certificates
are authenticated and delivered in accordance with this Ordinance, shall be cancelled and proper
records made regarding such payment, redemption, exchange, or replacement. The Paying
Agent/Registrar shall then return such cancelled Certificates to the City or may in accordance
with law destroy such cancelled Certificates and periodically furnish the City with certificates of
destruction of such Certificates.
Section 3.08. Temporary Certificates.
(a) Following the delivery and registration of the Initial Certificate and pending the
preparation of definitive Certificates, the City may execute and, upon the City's request, the
Paying Agent/Registrar shall authenticate and deliver, one or more temporary Certificates that
are printed, lithographed, typewritten, mimeographed, or otherwise produced, in any
denomination, substantially of the tenor of the definitive Certificates in lieu of which they are
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delivered, without coupons, and with such appropriate insertions, omissions, substitutions, and
other variations as the officers of the City executing such temporary Certificates may determine,
as evidenced by their signing of such temporary Certificates.
(b) Until exchanged for Certificates in definitive form, such Certificates in temporary
form shall be entitled to the benefit and security of this Ordinance.
(c) The City, without unreasonable delay, shall prepare, execute and deliver to the
Paying Agent/Registrar the Certificates in definitive form; thereupon, upon the presentation and
surrender of the Certificate or Certificates in temporary form to the Paying Agent/Registrar, the
Paying Agent/Registrar shall cancel the Certificates in temporary form and shall authenticate and
deliver in exchange therefor a Certificate or Certificates of the same maturity and series, in
definitive form, in the authorized denomination, and in the same aggregate principal amount, as
the Certificate or Certificates in temporary form surrendered. Such exchange shall be made
without the making of any charge therefor to any Owner.
Section 3.09. Replacement Certificates.
(a) Upon the presentation and surrender to the Paying Agent/Registrar of a mutilated
Certificate, the Paying Agent/Registrar shall authenticate and deliver in exchange therefor a
replacement Certificate of the same series and of like tenor and principal amount, bearing a
number not contemporaneously outstanding. The City or the Paying Agent/Registrar may
require the Owner of such Certificate to pay a sum sufficient to cover any tax or other
governmental charge that is authorized to be imposed in connection therewith and any other
expenses connected therewith.
(b) In the event that any Certificate is lost, apparently destroyed or wrongfully taken,
the Paying Agent/Registrar, pursuant to the applicable laws of the State of Texas and in the
absence of notice or knowledge that such Certificate has been acquired by a bona fide purchaser,
shall authenticate and deliver a replacement Certificate of the same series and of like tenor and
principal amount, bearing a number not contemporaneously outstanding, provided that the
Owner first:
(i) furnishes to the Paying Agent/Registrar satisfactory evidence of his or her
ownership of and the circumstances of the loss, destruction, or theft of such Certificate;
(ii) furnishes such security or indemnity as may be required by the Paying
Agent/Registrar to save it and the City harmless;
(iii) pays all expenses and charges in connection therewith, including, but not
limited to, printing costs, legal fees, fees of the Paying Agent/Registrar, and any tax or
other governmental charge that is authorized to be imposed; and
(iv) satisfies any other reasonable requirements imposed by the City and the
Paying Agent/Registrar.
(c) If, after the delivery of such replacement Certificate, a bona fide purchaser of the
original Certificate in lieu of which such replacement Certificate was issued presents for
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payment such original Certificate, the City and the Paying Agent/Registrar shall be entitled to
recover such replacement Certificate from the person to whom it was delivered or any person
taking therefrom, except a bona fide purchaser, and shall be entitled to recover upon the security
or indemnity provided therefor to the extent of any loss, damage, cost, or expense incurred by the
City or the Paying Agent/Registrar in connection therewith.
(d) In the event that any such mutilated, lost, apparently destroyed, or wrongfully
taken Certificate has become or is about to become due and payable, the Paying Agent/Registrar,
in its discretion, instead of issuing a replacement Certificate, may pay such Certificate when it
becomes due and payable.
(e) Each replacement Certificate delivered in accordance with this Section shall
constitute an original additional contractual obligation of the City and shall be entitled to the
benefits and security of this Ordinance to the same extent as the Certificate or Certificates in lieu
of which such replacement Certificate is delivered.
Section 3.10. Book -Entry System.
(a) Notwithstanding any other provision hereof, upon initial issuance of the
Certificates, the Certificates shall be registered in the name of Cede & Co., as nominee of DTC.
The definitive Certificates shall be initially issued in the form of a single separate certificate for
each of the maturities thereof.
(b) With respect to Certificates registered in the name of Cede & Co., as nominee of
DTC, the City and the Paying Agent/Registrar shall have no responsibility or obligation to any
DTC Participant or to any person on behalf of whom such a DTC Participant holds an interest in
the Certificates. Without limiting the immediately preceding sentence, the City and the Paying
Agent/Registrar shall have no responsibility or obligation with respect to (i) the accuracy of the
records of DTC, Cede & Co. or any DTC Participant with respect to any ownership interest in
the Certificates, (ii) the delivery to any DTC Participant or any other person, other than an
Owner, as shown on the Register, of any notice with respect to the Certificates, including any
notice of redemption, or (iii) the payment to any DTC Participant or any other person, other than
an Owner, as shown in the Register of any amount with respect to principal of or interest on the
Certificates. Notwithstanding any other provision of this Ordinance to the contrary, the City and
the Paying Agent/Registrar shall be entitled to treat and consider the person in whose name each
Certificate is registered in the Register as the absolute owner of such Certificate for the purpose
of payment of principal of and interest on Certificates, for the purpose of giving notices of
redemption and other matters with respect to such Certificate, for the purpose of registering
transfer with respect to such Certificate, and for all other purposes whatsoever. The Paying
Agent/Registrar shall pay all principal of and interest on the Certificates only to or upon the
order of the respective Owners as shown in the Register, as provided in this Ordinance, or their
respective attorneys duly authorized in writing, and all such payments shall be valid and
effective to fully satisfy and discharge the City's obligations with respect to payment of interest
on the Certificates to the extent of the sum or sums so paid. No person other than an Owner, as
shown in the Register, shall receive a certificate evidencing the obligation of the City to make
payments of amounts due pursuant to this Ordinance. Upon delivery by DTC to the Paying
Agent/Registrar of written notice to the effect that DTC has determined to substitute a new
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nominee in place of Cede & Co., the word "Cede & Co." in this Ordinance shall refer to such
new nominee of DTC.
(c) The Representation Letter previously executed and delivered by the City, and
applicable to the City's obligations delivered in book -entry -only form to DTC as securities
depository, is hereby ratified and approved for the Certificates.
Section 3.11. Successor Securities Depository; Transfer Outside Book -Entry -Only
System.
In the event that the City determines that it is in the best interest of the City and the
beneficial owners of the Certificates that they be able to obtain certificated Certificates, or in the
event DTC discontinues the services described herein, the City shall (i) appoint a successor
securities depository, qualified to act as such under Section 17(a) of the Securities and Exchange
Act of 1934, as amended, notify DTC and DTC Participants of the appointment of such
successor securities depository and transfer one or more separate Certificates to such successor
securities depository; or (ii) notify DTC and DTC Participants of the availability through DTC of
certificated Certificates and cause the Paying Agent/Registrar to transfer one or more separate
registered Certificates to DTC Participants having Certificates credited to their DTC accounts.
In such event, the Certificates shall no longer be restricted to being registered in the Register in
the name of Cede & Co., as nominee of DTC, but may be registered in the name of the successor
securities depository, or its nominee, or in whatever name or names Owners transferring or
exchanging Certificates shall designate, in accordance with the provisions of this Ordinance.
Section 3.12. Payments to Cede & Co.
Notwithstanding any other provision of this Ordinance to the contrary, so long as the
Certificates are registered in the name of Cede & Co., as nominee of DTC, all payments with
respect to principal of and interest on such Certificates, and all notices with respect to such
Certificates shall be made and given, respectively, in the manner provided in the Representation
Letter of the City to DTC.
ARTICLE IV
REDEMPTION OF CERTIFICATES BEFORE MATURITY
Section 4.01. Redemption.
The Certificates are subject to redemption before their scheduled maturity only as
provided in this Article IV.
Section 4.02. Optional Redemption.
(a) The City reserves the right and option to redeem Certificates maturing on and
after February 15, 2028, in inverse order of maturity, in whole or in part before their respective
scheduled maturity dates, on August 15, 2027, or on any date thereafter, at a price equal to the
principal amount of the Certificates so called for redemption plus accrued interest to the date
fixed for redemption.
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(b) If less than all of the Certificates are to be redeemed pursuant to an optional
redemption, the City shall determine the maturity or maturities and the amounts thereof to be
redeemed and shall direct the Paying Agent/Registrar to call by lot, or by any other customary
method that results in a random selection, the Certificates, or portions thereof, within such
maturity or maturities and in such principal amounts for redemption.
(c) The City, at least forty-five (45) days before the redemption date, unless a shorter
period shall be satisfactory to the Paying Agent/Registrar, shall notify the Paying
Agent/Registrar of such redemption date and of the principal amount of Certificates to be
redeemed.
Section 4.03. Mandatory Sinking Fund Redemption.
The Certificates shall not be subject to mandatory redemption prior to their scheduled
maturity.
Section 4.04. Partial Redemption.
(a) A portion of a single Certificate of a denomination greater than $5,000 may be
redeemed, but only in a principal amount equal to $5,000 or any integral multiple thereof. If
such a Certificate is to be partially redeemed, the Paying Agent/Registrar shall treat each $5,000
portion of the Certificate as though it were a single Certificate for purposes of selection for
redemption.
(b) Upon surrender of any Certificate for redemption in part, the Paying
Agent/Registrar, in accordance with Section 3.06 of this Ordinance, shall authenticate and
deliver an exchange Certificate or Certificates in an aggregate principal amount equal to the
unredeemed portion of the Certificate so surrendered, such exchange being without charge.
(c) The Paying Agent/Registrar shall promptly notify the City in writing of the
principal amount to be redeemed of any Certificate as to which only a portion thereof is to be
redeemed.
Section 4.05. Notice of Redemption to Owners.
(a) The Paying Agent/Registrar shall give notice of any redemption of Certificates by
sending notice by United States mail, first class postage prepaid, not less than thirty (30) days
before the date fixed for redemption, to the Owner of each Certificate (or part thereof) to be
redeemed, at the address shown on the Register at the close of business on the Business Day next
preceding the date of mailing such notice.
(b) The notice shall state the redemption date, the redemption price, the place at
which the Certificates are to be surrendered for payment, and, if less than all the Certificates
outstanding are to be redeemed, an identification of the Certificates or portions thereof to be
redeemed.
(c) The City reserves the right to give notice of its election or direction to redeem
Certificates under Section 4.02 conditioned upon the occurrence of subsequent events. Such
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notice may state (i) that the redemption is conditioned upon the deposit of moneys and/or
authorized securities, in an amount equal to the amount necessary to effect the redemption, with
the Paying Agent/Registrar, or such other entity as may be authorized by law, no later than the
redemption date or (ii) that the City retains the right to rescind such notice at any time prior to
the scheduled redemption date if the City delivers a certificate of the City to the Paying
Agent/Registrar instructing the Paying Agent/Registrar to rescind the redemption notice, and
such notice and redemption shall be of no effect if such moneys and/or authorized securities are
not so deposited or if the notice is rescinded. The Paying Agent/Registrar shall give prompt
notice of any such rescission of a conditional notice of redemption to the affected Owners. Any
Certificates subject to conditional redemption where redemption has been rescinded shall remain
Outstanding, and the rescission shall not constitute an event of default. Further, in the case of a
conditional redemption, the failure of the City to make moneys and/or authorized securities
available in part or in whole on or before the redemption date shall not constitute an event of
default.
(d) Any notice given as provided in this Section shall be conclusively presumed to
have been duly given, whether or not the Owner receives such notice.
Section 4.06. Payment Upon Redemption.
(a) Before or on each redemption date, the City shall deposit with the Paying
Agent/Registrar money sufficient to pay all amounts due on the redemption date and the Paying
Agent/Registrar shall make provision for the payment of the Certificates to be redeemed on such
date by setting aside and holding in trust such amounts as are received by the Paying
Agent/Registrar from the City and shall use such funds solely for the purpose of paying the
principal of and accrued interest on the Certificates being redeemed.
(b) Upon presentation and surrender of any Certificate called for redemption at the
Designated Payment/Transfer Office on or after the date fixed for redemption, the Paying
Agent/Registrar shall pay the principal of and accrued interest on such Certificate to the date of
redemption from the money set aside for such purpose.
Section 4.07. Effect of Redemption.
(a) Notice of redemption having been given as provided in Section 4.05 of this
Ordinance and subject to any conditions or rights reserved by the City under Section 4.05(c), the
Certificates or portions thereof called for redemption shall become due and payable on the date
fixed for redemption and, unless the City defaults in its obligation to make provision for the
payment of the principal thereof or accrued interest thereon, such Certificates or portions thereof
shall cease to bear interest from and after the date fixed for redemption, whether or not such
Certificates are presented and surrendered for payment on such date.
(b) If the City shall fail to make provision for payment of all sums due on a
redemption date, then any Certificate or portion thereof called for redemption shall remain
outstanding and continue to bear interest at the rate stated on the Certificate until due provision is
made for the payment of same by the City.
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Section 4.08. Lapse of Payment.
Money set aside for the redemption of Certificates and remaining unclaimed by the
Owners of such Certificates shall be subject to the provisions of Section 3.03(f) hereof.
ARTICLE V
PAYING AGENT/REGISTRAR
Section 5.01. Appointment of Paving Agent/Registrar.
The form of Paying Agent/Registrar Agreement presented at the meeting at which this
Ordinance was approved and the appointment of The Bank of New York Mellon Trust
Company, N.A. as the Paying Agent/Registrar are hereby approved.
The Mayor is hereby authorized and directed to execute the Paying Agent/Registrar
Agreement with the Paying Agent/Registrar, specifying the duties and responsibilities of the City
and the Paying Agent/Registrar, in substantially the form presented at the meeting at which this
Ordinance was approved with such changes as may be approved by an Authorized Officer. The
signature of the Mayor shall be attested by the City Secretary.
Section 5.02. Qualifications.
Each Paying Agent/Registrar shall be a commercial bank, a trust company organized
under the laws of the State of Texas, or other entity duly qualified and legally authorized to serve
as and perform the duties and services of paying agent and registrar for the Certificates.
Section 5.03. Maintaining Paving Agent/Registrar.
(a) At all times while any Certificates are outstanding, the City will maintain a
Paying Agent/Registrar that is qualified under Section 5.02 of this Ordinance.
(b) If the Paying Agent/Registrar resigns or otherwise ceases to serve as such, the
City will promptly appoint a replacement.
Section 5.04. Termination.
The City, upon not less than sixty (60) days notice, reserves the right to terminate the
appointment of any Paying Agent/Registrar by delivering to the entity whose appointment is to
be terminated written notice of such termination.
Section 5.05. Notice of Change to Owners.
Promptly upon each change in the entity serving as Paying Agent/Registrar, the City will
cause notice of the change to be sent to each Owner by United States mail, first class postage
prepaid, at the address thereof in the Register, stating the effective date of the change and the
name and mailing address of the replacement Paying Agent/Registrar.
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Section 5.06. Agreement to Perform Duties and Functions.
By accepting the appointment as Paying Agent/Registrar and executing the Paying
Agent/Registrar Agreement, the Paying Agent/Registrar is deemed to have agreed to the
provisions of this Ordinance and that it will perform the duties and functions of Paying
Agent/Registrar prescribed thereby.
Section 5.07. Delivery of Records to Successor.
If a Paying Agent/Registrar is replaced, such Paying Agent/Registrar, promptly upon the
appointment of the successor, will deliver the Register (or a copy thereof) and all other pertinent
books and records relating to the Certificates to the successor Paying Agent/Registrar.
ARTICLE VI
FORM OF THE CERTIFICATES
Section 6.01. Form Generally.
(a) The Certificates, including the Registration Certificate of the Comptroller of
Public Accounts of the State of Texas, the Certificate of the Paying Agent/Registrar, and the
Assignment form to appear on each of the Certificates, (i) shall be generally in the form set forth
in Exhibit A hereto, with such appropriate insertions, omissions, substitutions, and other
variations as are permitted or required by this Ordinance, and (ii) may have such letters,
numbers, or other marks of identification (including identifying numbers and letters of the
Committee on Uniform Securities Identification Procedures of the American Bankers
Association) and such legends and endorsements (including any reproduction of an opinion of
counsel) thereon as, consistently herewith, may be determined by the City or by the officers
executing such Certificates, as evidenced by their execution thereof.
(b) Any portion of the text of any Certificates may be set forth on the reverse side
thereof, with an appropriate reference thereto on the face of the Certificates.
(c) The definitive Certificates, if any, shall be typewritten, photocopied, printed,
lithographed, or engraved, and may be produced by any combination of these methods or
produced in any other similar manner, all as determined by the officers executing such
Certificates, as evidenced by their execution thereof.
(d) The Initial Certificate submitted to the Attorney General of the State of Texas
may be typewritten and photocopied or otherwise reproduced.
Section 6.02. CUSIP Registration.
The City or the Purchaser may secure identification numbers through CUSIP Global
Services, managed on behalf of the American Bankers Association by S&P Capital IQ, and may
authorize the printing of such numbers on the face of the Certificates. It is expressly provided,
however, that the presence or absence of CUSIP numbers on the Certificates shall be of no
significance or effect in regard to the legality thereof and neither the City nor the attorneys
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approving said Certificates as to legality are to be held responsible for CUSIP numbers
incorrectly printed on the Certificates.
Section 6.03. Legal Opinion.
The approving legal opinion of Andrews Kurth Kenyon LLP, Bond Counsel, may be
attached to or printed on the reverse side of each Certificate over the certification of the City
Secretary of the City, which may be executed in facsimile.
Section 6.04. Statement of Insurance.
A statement relating to a municipal bond insurance policy, if any, to be issued for any
Certificate or Certificates may be printed on or attached to each such Certificate.
ARTICLE VII
SALE, CONTROL AND DELIVERY OF CERTIFICATES; DEPOSIT OF PROCEEDS
Section 7.01. Sale of Certificates; Approval of Private Placement Memorandum.
(a) The sale of the Certificates to the Purchaser at a price of the par value thereof, is
hereby approved. It is hereby officially found, determined and declared that the above price and
terms of sale of the Certificates are the most advantageous reasonable obtainable by the City.
(b) The obligation of the Purchaser to accept delivery of the Certificates is subject to
the closing conditions set forth in the resolution of the Purchaser approving the City's application
for financial assistance being satisfied, including specifically the Purchaser being furnished with
the final, approving opinion of Andrews Kurth Kenyon LLP, bond counsel for the City, which
opinion shall be dated as of and delivered on the Closing Date.
(c) The City hereby approves the form and content of the Private Placement
Memorandum prepared in connection with the sale of the Certificates and presented to the City
with this Ordinance, together with such changes as may be approved by an Authorized Officer,
and authorizes the distribution and delivery of the Private Placement Memorandum to the
Purchaser. An Authorized Officer is authorized to execute such Private Placement
Memorandum to evidence the approval thereof.
Section 7.02. Control and Delivery of Certificates.
(a) The Authorized Officer of the City is hereby authorized to have control of the
Initial Certificate and all necessary records and proceedings pertaining thereto pending
investigation, examination, and approval of the Attorney General of the State of Texas,
registration by the Comptroller of Public Accounts of the State of Texas and registration with,
and initial exchange or transfer by, the Paying Agent/Registrar.
(b) After registration by the Comptroller of Public Accounts, delivery of the
Certificates shall be made to the Purchaser under and subject to the general supervision and
direction of the Authorized Officer, against receipt by the City of all amounts due to the City
under the terms of sale.
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(c) In the event the Mayor or City Secretary is absent or otherwise unable to execute
any document or take any action authorized herein, the Mayor Pro Tem and the Assistant City
Secretary, respectively, shall be authorized to execute such documents and take such actions, and
the performance of such duties by the Mayor Pro Tem and the Assistant City Secretary shall for
the purposes of this Ordinance have the same force and effect as if such duties were performed
by the Mayor and City Secretary, respectively.
Section 7.03. Deposit of Proceeds.
The City hereby establishes a special project fund, which shall be kept segregated and
apart from other funds and accounts of the City. The proceeds from the sale of the Certificates
shall be deposited to the special project fund and used only for the purposes set forth in Section
3.01 of this Ordinance and to pay all expenses arising in connection with the issuance of the
Certificates. Any proceeds of the Certificates, together with earnings from the investment
thereof, remaining after making all such deposits and payments shall be used as provided in
Section 9.04(a) of this Ordinance.
Notwithstanding the above and foregoing, immediately following the delivery of the
Certificates and prior to the deposit of the proceeds from the sale of such Certificates in the
special project fund, such proceeds shall be held in trust and in escrow pursuant to the written
escrow agreement described below pending written authorization to release said proceeds.
A "Special Escrow Deposit Agreement" by and between the City and The Bank of New
York Mellon Trust Company, N.A., Dallas, Texas, attached hereto as Exhibit B and incorporated
herein by reference as a part of this Ordinance for all purposes, is hereby approved as to form
and content, and the Mayor and the City Secretary of the City are hereby authorized and directed
to execute such Special Escrow Deposit Agreement in substantially the same form and content
herein approved.
ARTICLE VIII
INVESTMENTS
Section 8.01. Investments.
(a) Money in the Interest and Sinking Fund created by this Ordinance and any special
accounts provided for herein, at the City's option, may be invested in such securities or
obligations as permitted under applicable law, including Chapters 2256 and 2257, Texas
Government Code. The Authorized Officer, and any other officer of the City authorized to make
investments on behalf of the City, are hereby authorized and directed to execute and deliver, on
behalf of the City, any and all investment agreements, guaranteed investment contracts or
repurchase agreements in connection with the investment of moneys on deposit in the Interest
and Sinking Fund and any special accounts provided for herein, but only to the extent such
investment agreements, guaranteed investment contracts or repurchase agreements are authorized
investments under applicable law.
(b) Any securities or obligations in which money in the Interest and Sinking Fund is
so invested shall be kept and held in trust for the benefit of the Owners and shall be sold and the
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proceeds of sale shall be timely applied to the making of all payments required to be made from
the fund from which the investment was made.
Section 8.02. Investment Income.
(a) Interest and income derived from investment of the Interest and Sinking Fund
shall be credited to such fund.
(b) Interest and income derived from investment of the other funds to be deposited
pursuant to Section 7.03 hereof shall be credited to the fund or account where deposited until the
acquisition or construction of said projects is completed or shall be transferred to the Interest and
Sinking Fund as shall be determined by the City Council. Upon completion of the authorized
projects, to the extent such interest and income are present, such interest and income shall be
deposited to the Interest and Sinking Fund.
ARTICLE IX
PARTICULAR REPRESENTATIONS AND COVENANTS
Section 9.01. Payment of the Certificates.
On or before each Interest Payment Date for the Certificates and while any of the
Certificates are outstanding and unpaid, there shall be made available to the Paying
Agent/Registrar, out of the Interest and Sinking Fund, money sufficient to pay such interest on
and principal of the Certificates as will accrue or mature on the applicable Interest Payment Date,
maturity date or date of prior redemption.
Section 9.02. Other Representations and Covenants.
(a) The City will faithfully perform at all times any and all covenants, undertakings,
stipulations, and provisions contained in this Ordinance and in each Certificate; the City will
promptly pay or cause to be paid the principal of and interest on each Certificate on the dates and
at the places and manner prescribed in such Certificate; and the City will, at the times and in the
manner prescribed by this Ordinance, deposit or cause to be deposited the amounts of money
specified by this Ordinance.
(b) The City is duly authorized under the laws of the State of Texas to issue the
Certificates; all action on its part for the creation and issuance of the Certificates has been duly
and effectively taken; and the Certificates in the hands of the Owners thereof are and will be
valid and enforceable obligations of the City in accordance with their terms.
Section 9.03. Federal Income Tax Exclusion.
(a) Not to Cause Interest to Become Taxable. The City shall not use, permit the use
of or omit to use Gross Proceeds or any other amounts (or any property the acquisition,
construction or improvement of which is to be financed directly or indirectly with Gross
Proceeds) in a manner which, if made or omitted, respectively, would cause the interest on any
Certificate to become includable in the gross income, as defined in Section 61 of the Code, of the
owner thereof for federal income tax purposes. Without limiting the generality of the foregoing,
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unless and until the City shall have received a written opinion of counsel nationally recognized
in the field of municipal bond law to the effect that failure to comply with such covenant will not
adversely affect the exemption from federal income tax of the interest on any Certificate, the
City shall comply with each of the specific covenants in this Section.
(b) No Private Use or Private Payments. Except as permitted by Section 141 of the
Code and the Regulations and rulings thereunder, the City shall, at all times after the Issue Date
of any Certificate and prior to the last stated maturity of the Certificates
(i) exclusively own, operate, and possess all property the acquisition,
construction, or improvement of which is to be financed directly or indirectly with Gross
Proceeds of such Certificate and not use or permit the use of such Gross Proceeds or any
property acquired, constructed, or improved with such Gross Proceeds in any activity
carried on by any person or entity other than a state or local government, unless such use
is solely as a member of the general public, or
(ii) not directly or indirectly impose or accept any charge or other payment for
use of Gross Proceeds of such Certificate or any property the acquisition, construction or
improvement of which is to be financed directly or indirectly with such Gross Proceeds
other than taxes of general application and interest earned on investments acquired with
such Gross Proceeds pending application for their intended purposes.
(c) No Private Loan. Except to the extent permitted by Section 141 of the Code and
the Regulations and rulings thereunder, the City shall not use Gross Proceeds of such Certificate
to make or finance loans to any person or entity other than a state or local government. For
purposes of the foregoing covenant, Gross Proceeds are considered to be "loaned" to a person or
entity if (1) property acquired, constructed or improved with Gross Proceeds is sold or leased to
such person or entity in a transaction which creates a debt for federal income tax purposes, (2)
capacity in or service from such property is committed to such person or entity under a take -or -
pay, output, or similar contract or arrangement, or (3) indirect benefits, or burdens and benefits
of ownership, of such Gross Proceeds or such property are otherwise transferred in a transaction
which is the economic equivalent of a loan.
(d) Not to Invest at Higher Yield. Except to the extent permitted by Section 148 of
the Code and the Regulations and rulings thereunder, the City shall not, at any time prior to the
earlier of the final stated maturity or final payment of such Certificate, directly or indirectly
invest Gross Proceeds of such Certificate in any Investment (or use such Gross Proceeds to
replace money so invested), if as a result of such investment the Yield of all Investments
allocated to such Gross Proceeds whether then held or previously disposed of, exceeds the Yield
on the Certificates.
(e) Not Federally Guaranteed. Except to the extent permitted by Section 149(b) of
the Code and the Regulations and rulings thereunder, the City shall not take or omit to take any
action which would cause the Certificates to be federally guaranteed within the meaning of
Section 149(b) of the Code and the Regulations and rulings thereunder.
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(f) Information Report. The City shall timely file with the Secretary of the Treasury
the information required by Section 149(e) of the Code with respect to the Certificates on such
forms and in such place as such Secretary may prescribe.
(g) Payment of Rebate Amount. Except to the extent otherwise provided in Section
148(f) of the Code and the Regulations and rulings thereunder, the City shall:
(i) account for all Gross Proceeds (including all receipts, expenditures and
investments thereof) on its books of account separately and apart from all other funds
(and receipts, expenditures and investments thereof) and shall retain all records of such
accounting for at least six years after the final Computation Date. The City may,
however, to the extent permitted by law, commingle Gross Proceeds of the Certificates
with other money of the City, provided that the City separately accounts for each receipt
and expenditure of such Gross Proceeds and the obligations acquired therewith,
(ii) calculate the Rebate Amount with respect to the Certificates not less
frequently than each Computation Date, in accordance with rules set forth in Section
148(f) of the Code, Section 1.148-3 of the Regulations, and the rulings thereunder. The
City shall maintain a copy of such calculations for at least six years after the final
Computation Date,
(iii) as additional consideration for the purchase of the Certificates by the
initial purchaser thereof and the loan of the money represented thereby, and in order to
induce such purchase by measures designed to ensure the excludability of the interest
thereon from the gross income of the owners thereof for federal income tax purposes, pay
to the United States the amount described in paragraph (ii) above at the times, in the
installments, to the place, in the manner and accompanied by such forms or other
information as is or may be required by Section 148(f) of the Code and the Regulations
and rulings thereunder, and
(iv) exercise reasonable diligence to assure that no errors are made in the
calculations required by paragraph (ii) and, if such error is made, to discover and
promptly to correct such error within a reasonable amount of time thereafter, including
payment to the United States of any interest and any penalty required by the Regulations.
(h) Not to Divert Arbitrage Profits. Except to the extent permitted by Section 148 of
the Code and the Regulations and rulings thereunder, the City shall not enter into any transaction
that reduces the amount required to be paid to the United States pursuant to Subsection (h) of this
Section because such transaction results in a smaller profit or a larger loss than would have
resulted if the transaction had been at arm's length and had the Yield of the Certificates, not been
relevant to either party.
(i) Not Hedge Bonds. The City will not invest more than 50 percent of the Proceeds
of the Certificates in Nonpurpose Investments having a guaranteed yield for four years or more.
On the Issue Date of the Certificates, the City reasonably expects that at least 85 percent of the
Net Sale Proceeds of the Certificates will be used to carry out the governmental purpose of such
series within three years after the Issue Date.
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Section 9.04. Compliance with the Texas Water Development Board's Rules and
Regulations. The City will comply with all of the requirements contained in the resolution or
resolutions adopted by the Purchaser with respect to the issuance of the Certificates. In addition,
in compliance with the Purchaser's Clean Water State Revolving Fund Loan Program Rules, the
City agrees and covenants that:
(a) Any loan proceeds from the Certificates that are determined to be surplus
proceeds remaining after completion of one or more of the projects described in Section 3.01
hereof shall be used for the following purposes as approved by the Executive Administrator: (1)
to redeem, in inverse annual order, the Certificates owned by the Purchaser; (2) deposit into the
Interest and Sinking Fund or other debt service account for the payment of interest or principal
on the Certificates owned by the Purchaser; (3) eligible costs for a project as authorized by the
Executive Administrator or (4) deposit into a reserve fund;
(b) The City shall indemnify, hold harmless and protect the TWDB from any and all
claims, causes of action or damages to the person or property of third parties arising from the
sampling, analysis, transport, storage, treatment and disposition of any contaminated sewage
sludge, contaminated sediments and/or contaminated media that may be generated by the City,
its contractors, consultants, agents, officials and employees as a result of activities relating to the
project, to the extent permitted by law;
(c) Neither the City nor a related party thereto will acquire any of the TWDB's
Source Series Bonds in an amount related to the amount of the Certificates to be acquired from
the City by the TWDB;
(d) The City shall ensure that (i) all laborers and mechanics employed by contractors
and subcontractors for projects be paid wages at rates not less than those prevailing on projects
of a similar character in the City in accordance with the Davis -Bacon Act, and the U.S.
Department of Labor's implementing regulations and (ii) all project contracts mandate
compliance with the Davis -Bacon Act;
(e) The City shall (i) provide the TWDB with all information required to be reported
in accordance with the Federal Funding Accountability and Transparency Act of 2006, Pub. L.
109-282, as amended by Pub. L. 110-252; (ii) obtain a Data Universal Numbering System
Number, and (iii) register with the System for Award Management and maintain such
registration while the Certificates are outstanding;
(f) The City shall (i) timely and expeditiously use all loan proceeds, as required by
federal statute and EPA regulations and (ii) adhere to an Executive Administrator -approved
project schedule, which shall not be altered except for good cause shown and only with the
written approval of the Executive Administrator;
(g) The City shall abide by all applicable construction contract requirements related
to the use of iron and steel products produced in the United States, as required by the 2014
Federal Appropriations Act and related State Revolving Fund Policy Guidelines;
(h) The City shall keep and maintain full and complete records and accounts
pertaining to the construction of the project financed with the proceeds of sale of the Certificates,
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including the special accounts described herein, in accordance with the standards set forth by the
Government Accounting Standard Board. Upon completion of the construction of the projects
financed, in whole or in part, by the loan evidenced by the Certificates, the City shall provide a
final accounting to the TWDB of the total costs of the projects;
(i) The City shall pay an origination fee to the TWDB pursuant to 31 Texas
Administrative Code, Section 375.16(b) prior to or at the delivery of the Certificates;
0) So long as any Certificates are held by the TWDB, the City shall provide to the
TWDB's Executive Administrator a copy of each of its annual audited financial statements, to
be submitted without charge; and
(k) The City shall maintain insurance coverage on the projects financed with the
proceeds of the Certificates as contemplated by 31 Texas Administrative Code, Section
375.91(a)(2)(J), or as otherwise approved by the Executive Administrator.
ARTICLE X
DEFAULT AND REMEDIES
Section 10.01. Events of Default.
Each of the following occurrences or events for the purpose of this Ordinance is hereby
declared to be an Event of Default:
(i) the failure to make payment of the principal of or interest on any of the
Certificates when the same becomes due and payable; or
(ii) default in the performance or observance of any other covenant,
agreement, or obligation of the City, which default materially and adversely affects the
rights of the Owners, including but not limited to their prospect or ability to be repaid in
accordance with this Ordinance, and the continuation thereof for a period of sixty (60)
days after notice of such default is given by any Owner to the City.
Section 10.02. Remedies for Default.
(a) Upon the happening of any Event of Default, then any Owner or an authorized
representative thereof, including but not limited to a trustee or trustees therefor, may proceed
against the City for the purpose of protecting and enforcing the rights of the Owners under this
Ordinance by mandamus or other suit, action or special proceeding in equity or at law in any
court of competent jurisdiction for any relief permitted by law, including the specific
performance of any covenant or agreement contained herein, or thereby to enjoin any act or thing
that may be unlawful or in violation of any right of the Owners hereunder or any combination of
such remedies.
(b) It is provided that all such proceedings shall be instituted and maintained for the
equal benefit of all Owners of Certificates then outstanding.
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Section 10.03. Remedies Not Exclusive.
(a) No remedy herein conferred or reserved is intended to be exclusive of any other
available remedy, but each and every such remedy shall be cumulative and shall be in addition to
every other remedy given hereunder or under the Certificates or now or hereafter existing at law
or in equity; provided, however, that notwithstanding any other provision of this Ordinance, the
right to accelerate the debt evidenced by the Certificates shall not be available as a remedy under
this Ordinance.
(b) The exercise of any remedy herein conferred or reserved shall not be deemed a
waiver of any other available remedy.
ARTICLE XI
DISCHARGE
Section 11.01. Discharge.
The Certificates may be defeased, discharged or refunded in any manner permitted by
applicable law.
ARTICLE XII
CONTINUING DISCLOSURE UNDERTAKING
Section 12.01. Annual Reports.
(a) The City shall provide annually to the MSRB, (1) within six (6) months after the
end of each fiscal year of the City, financial information and operating data with respect to the
City, being information of the type described in Exhibit C hereto, including financial statements
of the City if audited financial statements of the City are then available, and (2) if not provided as
part such financial information and operating data, audited financial statements of the City, when
and if available. Any financial statements to be provided shall be (i) prepared in accordance with
the accounting principles described in Exhibit C, or such other accounting principles as the City
may be required to employ from time to time pursuant to state law or regulation, and (ii) audited,
if the City commissions an audit of such financial statements and the audit is completed within
the period during which they must be provided. If the audit of such financial statements is not
complete within twelve (12) months after any such fiscal year end, then the City shall file
unaudited financial statements within such 12 -month period and audited financial statements for
the applicable fiscal year, when and if the audit report on such financial statements becomes
available.
(b) If the City changes its fiscal year, it will notify the MSRB of the change (and of
the date of the new fiscal year end) prior to the next date by which the City otherwise would be
required to provide financial information and operating data pursuant to this Section.
(c) The financial information and operating data to be provided pursuant to this
Section may be set forth in full in one or more documents or may be included by specific
referenced to any document (including an official statement or other offering document, if it is
available from the MSRB) that theretofore has been provided to the MSRB or filed with the SEC.
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Section 12.02. Event Notices.
(a) The City shall notify the MSRB, in a timely manner (not in excess of ten (10)
Business Days after the occurrence of an event), of any of the following events with respect to
the Certificates:
(i) principal and interest payment delinquencies;
(ii) nonpayment related defaults, if material;
(iii) unscheduled draws on debt service reserves reflecting financial
difficulties;
(iv) unscheduled draws on credit enhancements reflecting financial
difficulties;
(v) substitution of credit or liquidity providers, or their failure to perform;
(vi) adverse tax opinions, the issuance by the Internal Revenue Service of
proposed or final determinations of taxability, Notices of Proposed Issue (IRS Form
5701-TEB) or other material notices or determinations with respect to the tax status of the
Certificates, or other material events affecting the tax status of the Certificates;
(vii) modifications to rights of Owners, if material;
(viii) redemption calls, if material, and tender offers;
(ix) defeasances;
(x) release, substitution, or sale of property securing repayment of the
Certificates, if material;
(xi) rating changes;
(xii) bankruptcy, insolvency, receivership or similar event of the City;
(xiii) the consummation of a merger, consolidation, or acquisition involving the
City or the sale of all or substantially all of the assets of the City, other than in the
ordinary course of business, the entry into a definitive agreement to undertake such an
action or the termination of a definitive agreement relating to any such actions, other than
pursuant to its terms, if material; and
(xiv) appointment of a successor Paying Agent/Registrar or change in the name
of the Paying Agent/Registrar, if material.
As used in clause (xii) above, the phrase "bankruptcy, insolvency, receivership or
similar event" means the appointment of a receiver, fiscal agent or similar officer for the
City in a proceeding under the U.S. Bankruptcy Code or in any other proceeding under
state or federal law in which a court of governmental authority has assumed jurisdiction
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over substantially all of the assets or business of the City, or if jurisdiction has been
assumed by leaving the City Council and official or officers of the City in possession but
subject to the supervision and orders of a court or governmental authority, or the entry of
an order confirming a plan of reorganization, arrangement or liquidation by a court or
governmental authority having supervision or jurisdiction over substantially all of the
assets or business of the City.
(b) The City shall notify the MSRB, in a timely manner, of any failure by the City to
provide financial information or operating data in accordance with Section 12.01 of this
Ordinance by the time required by such Section.
Section 12.03. Identifying Information.
All documents provided to the MSRB pursuant to this Article shall be provided in an
electronic format and be accompanied by identifying information as prescribed by the MSRB.
Section 12.04. Limitations, Disclaimers and Amendments.
(a) The City shall be obligated to observe and perform the covenants specified in this
Article for so long as, but only for so long as, the City remains an "obligated person" with respect
to the Certificates within the meaning of the Rule, except that the City in any event will give
notice of any Certificate calls and any defeasances that cause the City to be no longer an
"obligated person."
(b) The provisions of this Article are for the sole benefit of the Owners and beneficial
owners of the Certificates, and nothing in this Article, express or implied, shall give any benefit
or any legal or equitable right, remedy, or claim hereunder to any other person. The City
undertakes to provide only the financial information, operating data, financial statements, and
notices which it has expressly agreed to provide pursuant to this Article and does not hereby
undertake to provide any other information that may be relevant or material to a complete
presentation of the City's financial results, condition, or prospects or hereby undertake to update
any information provided in accordance with this Article or otherwise, except as expressly
provided herein. The City does not make any representation or warranty concerning such
information or its usefulness to a decision to invest in or sell Certificates at any future date.
UNDER NO CIRCUMSTANCES SHALL THE CITY BE LIABLE TO THE OWNER
OR BENEFICIAL OWNER OF ANY CERTIFICATE OR ANY OTHER PERSON, IN
CONTRACT OR TORT, FOR DAMAGES RESULTING IN WHOLE OR IN PART FROM
ANY BREACH BY THE CITY, WHETHER NEGLIGENT OR WITHOUT FAULT ON ITS
PART, OF ANY COVENANT SPECIFIED IN THIS ARTICLE, BUT EVERY RIGHT AND
REMEDY OF ANY SUCH PERSON, IN CONTRACT OR TORT, FOR OR ON ACCOUNT
OF ANY SUCH BREACH SHALL BE LIMITED TO AN ACTION FOR MANDAMUS OR
SPECIFIC PERFORMANCE.
(c) No default by the City in observing or performing its obligations under this
Article shall constitute a breach of or default under the Ordinance for purposes of any other
provisions of this Ordinance.
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(d) Nothing in this Article is intended or shall act to disclaim, waive, or otherwise
limit the duties of the City under federal and state securities laws.
(e) The provisions of this Article may be amended by the City from time to time to
adapt to changed circumstances that arise from a change in legal requirements, a change in law,
or a change in the identity, nature, status, or type of operations of the City, but only if (i) the
provisions of this Article, as so amended, would have permitted an underwriter to purchase or
sell Certificates in the primary offering of the Certificates in compliance with the Rule, taking
into account any amendments or interpretations of the Rule to the date of such amendment, as
well as such changed circumstances, and (ii) either (A) the Owners of a majority in aggregate
principal amount (or any greater amount required by any other provisions of this Ordinance that
authorizes such an amendment) of the outstanding Certificates consent to such amendment or (B)
an entity or individual person that is unaffiliated with the City (such as nationally recognized
bond counsel) determines that such amendment will not materially impair the interests of the
Owners and beneficial owners of the Certificates. If the City so amends the provisions of this
Article, it shall include with any amended financial information or operating data next provided
in accordance with Section 12.01 an explanation, in narrative form, of the reasons for the
amendment and of the impact of any change in type of financial information or operating data so
provided.
ARTICLE XIII
AMENDMENTS; ATTORNEY GENERAL MODIFICATION
Section 13.01. Amendments.
This Ordinance shall constitute a contract with the Owners, be binding on the City, and
shall not be amended or repealed by the City so long as any Certificate remains outstanding
except as permitted in this Section. The City may, without consent of or notice to any Owners,
from time to time and at any time, amend this Ordinance in any manner not detrimental to the
interests of the Owners, including the curing of any ambiguity, inconsistency, or formal defect or
omission herein. In addition, the City may, with the written consent of the Owners of the
Certificates holding a majority in aggregate principal amount of the Certificates then
outstanding, amend, add to, or rescind any of the provisions of this Ordinance; provided that,
without the consent of all Owners of outstanding Certificates, no such amendment, addition, or
rescission shall (i) extend the time or times of payment of the principal of and interest on the
Certificates, reduce the principal amount thereof, the redemption price, or the rate of interest
thereon, or in any other way modify the terms of payment of the principal of or interest on the
Certificates, (ii) give any preference to any Certificate over any other Certificate, or (iii) reduce
the aggregate principal amount of Certificates required to be held by Owners for consent to any
such amendment, addition, or rescission.
Section 13.02. Attorney General Modification.
In order to obtain the approval of the Certificates by the Attorney General of the State of
Texas, any provision of this Ordinance may be modified, altered or amended after the date of its
adoption if required by the Attorney General in connection with the Attorney General's
examination as to the legality of the Certificates and approval thereof in accordance with the
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applicable law. Such changes, if any, shall be provided to the City Secretary and the City
Secretary shall insert such changes into this Ordinance as if approved on the date hereof.
ARTICLE XIV
EFFECTIVE IMMEDIATELY
Section 14.01. Effective Immediately.
Notwithstanding the provisions of the City Charter, this Ordinance shall become effective
immediately upon its adoption at this meeting pursuant to Section 1201.028, Texas Government
Code.
[Signature Page Follows.]
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PRESENTED, FINALLY PASSED AND APPROVED, AND EFFECTIVE on the 12th
day of January, 2017, at a regular meeting of the City Council of the City of Lubbock, Texas.
ATTEST:
REBECCA GARZA, City Secretary
[SEAL]
APPROVED AS TO CONTENT:
L -11A
DAN POPE, Mayor
LINDA CUELLAR, Acting Executive Director of Finance
APPROVED AS TO FORM:
By:
JERRY V YLE, Jr., Bond Counsel
Signature Page for Ordinance
FIOU:3739065.1
EXHIBIT A
FORM OF THE CERTIFICATES
The form of the Certificates, including the form of the Registration Certificate of the
Comptroller of Public Accounts of the State of Texas, the form of Certificate of the Paying
Agent/Registrar and the form of Assignment appearing on the Certificates, shall be generally as
follows:
(a) Form of Certificate.
REGISTERED REGISTERED
No. $
United States of America
State of Texas
County of Lubbock
CITY OF LUBBOCK, TEXAS
TAX AND WATERWORKS SYSTEM SURPLUS REVENUE
CERTIFICATES OF OBLIGATION
SERIES 2017
CERTIFICATE
INTEREST RATE: MATURITY DATE: DATE: CUSIP NUMBER:
0.00% February 15, 20_ February 16, 2017 _
The City of Lubbock (the "City"), in the County of Lubbock, State of Texas, for value
received, hereby promises to pay to
or registered assigns, on the Maturity Date specified above, the sum of
DOLLARS
unless this Certificate shall have been sooner called for redemption and the payment of the
principal hereof shall have been paid or provided for, and to pay interest on such principal
amount from the later of February 16, 2017 or the most recent interest payment date to which
interest has been paid or provided for until payment of such principal amount has been paid or
provided for, at the per annum rate of interest specified above, computed on the basis of a 360 -
day year of twelve 30 -day months, such interest to be paid semiannually on February 15 and
August 15 of each year, commencing February 15, 2018. All capitalized terms used herein but
not defined shall have the meaning assigned to them in the Ordinance (defined below).
The principal of this Certificate shall be payable without exchange or collection charges
in lawful money of the United States of America upon presentation and surrender of this
Certificate at the corporate trust office in Dallas, Texas (the "Designated Payment/Transfer
Exhibit A-1
HOU:3739065.1
Office"), of The Bank of New York Mellon Trust Company, N.A., the initial Paying
Agent/Registrar, or, with respect to a successor Paying Agent/Registrar, at the Designated
Payment/Transfer Office of such successor. Interest on this Certificate is payable by check dated
as of the interest payment date, and will be mailed by the Paying Agent/Registrar to the
registered owner at the address shown on the registration books kept by the Paying
Agent/Registrar or by such other customary banking arrangement acceptable to the Paying
Agent/Registrar and the registered owner; provided, however, such registered owner shall bear
all risk and expenses of such customary banking arrangement. At the option of an Owner of at
least $1,000,000 principal amount of the Certificates, interest may be paid by wire transfer to the
bank account of such Owner on file with the Paying Agent/Registrar. For the purpose of the
payment of interest on this Certificate, the registered owner shall be the person in whose name
this Certificate is registered at the close of business on the "Record Date," which shall be the last
business day of the month next preceding such interest payment date; provided, however, that in
the event of nonpayment of interest on a scheduled payment date and for 30 days thereafter, a
new record date for such interest payment (a "Special Record Date") will be established by the
Paying Agent/Registrar, if and when funds for the payment of such interest have been received
from the City. Notice of the Special Record Date and of the scheduled payment date of the past
due interest (the "Special Payment Date," which shall be 15 days after the Special Record Date)
shall be sent at least five business days prior to the Special Record Date by first-class United
States mail, postage prepaid, to the address of each owner of a Certificate appearing in the
registration books of the Paying Agent/Registrar at the close of business on the last business day
next preceding the date of mailing of such notice.
If the date for the payment of the principal of or interest on this Certificate shall be a
Saturday, Sunday, legal holiday, or day on which banking institutions in the city where the
Designated Payment/Transfer Office of the Paying Agent/Registrar is located are required or
authorized by law or executive order to close, the date for such payment shall be the next
succeeding day that is not a Saturday, Sunday, legal holiday, or day on which banking
institutions are required or authorized to close, and payment on such date shall have the same
force and effect as if made on the original date payment was due.
This Certificate is one of a series of fully registered certificates specified in the title
hereof issued in the aggregate principal amount of $35,000,000 (herein referred to as the
"Certificates"), issued pursuant to a certain ordinance of the City (the "Ordinance") for the
purpose of paying contractual obligations to be incurred for authorized public improvements
(collectively, the "Project"), as described in the Ordinance, and to pay the contractual obligations
for professional services of attorneys, financial advisors and other professionals in connection
with the Project and the issuance of the Certificates.
The City has reserved the option to redeem the Certificates maturing on or after
February 15, 2028, in inverse order of maturity in whole or in part, before their respective
scheduled maturity dates, on August 15, 2027, or on any date thereafter, at a price equal to the
principal amount of the Certificates so called for redemption plus accrued interest to the date
fixed for redemption. If less than all of the Certificates are to be redeemed, the City shall
determine the maturity or maturities and the amounts thereof to be redeemed and shall direct the
Paying Agent/Registrar to call by lot or other customary method that results in a random
Exhibit A-2
HOU:3739065.1
selection the Certificates, or portions thereof, within such maturity and in such principal
amounts, for redemption.
Notice of such redemption or redemptions shall be given by first class mail, postage
prepaid, not less than thirty (30) days before the date fixed for redemption, to the registered
owner of each of the Certificates to be redeemed in whole or in part. In the Ordinance, the City
reserves the right in the case of an optional redemption to give notice of its election or direction
to redeem Certificates conditioned upon the occurrence of subsequent events. Such notice may
state (i) that the redemption is conditioned upon the deposit of moneys and/or authorized
securities, in an amount equal to the amount necessary to effect the redemption, with the Paying
Agent/Registrar, or such other entity as may be authorized by law, no later than the redemption
date or (ii) that the City retains the right to rescind such notice at any time prior to the scheduled
redemption date if the City delivers a certificate of the City to the Paying Agent/Registrar
instructing the Paying Agent/Registrar to rescind the redemption notice, and such notice and
redemption shall be of no effect if such moneys and/or authorized securities are not so deposited
or if the notice is rescinded. The Paying Agent/Registrar shall give prompt notice of any such
rescission of a conditional notice of redemption to the affected owners. Any Certificates subject
to conditional redemption where redemption has been rescinded shall remain Outstanding, and
the rescission shall not constitute an event of default. Further, in the case of a conditional
redemption, the failure of the City to make moneys and/or authorized securities available in part
or in whole on or before the redemption date shall not constitute an event of default.
As provided in the Ordinance, and subject to certain limitations therein set forth, this
Certificate is transferable upon surrender of this Certificate for transfer at the designated office of
the Paying Agent/Registrar with such endorsement or other evidence of transfer as is acceptable
to the Paying Agent/Registrar; thereupon, one or more new fully registered Certificates of the
same stated maturity, of authorized denominations, bearing the same rate of interest, and for the
same aggregate principal amount will be issued to the designated transferee or transferees.
Neither the City nor the Paying Agent/Registrar shall be required to issue, transfer or
exchange any Certificate called for redemption where such redemption is scheduled to occur
within forty five (45) calendar days of the transfer or exchange date; provided, however, such
limitation shall not be applicable to an exchange by the registered owner of the uncalled
principal balance of a Certificate.
The City, the Paying Agent/Registrar, and any other person may treat the person in whose
name this Certificate is registered as the owner hereof for the purpose of receiving payment as
herein provided (except interest shall be paid to the person in whose name this Certificate is
registered on the Record Date or Special Record Date, as applicable) and for all other purposes,
whether or not this Certificate be overdue, and neither the City nor the Paying Agent/Registrar
shall be affected by notice to the contrary.
IT IS HEREBY CERTIFIED AND RECITED that the issuance of this Certificate and the
series of which it is a part is duly authorized by law; that all acts, conditions, and things to be
done precedent to and in the issuance of the Certificates have been properly done and performed
and have happened in regular and due time, form, and manner as required by law; that ad
valorem taxes upon all taxable property in the City have been levied for and pledged to the
Exhibit A-3
HOU:3739065.1
payment of the debt service requirements of the Certificates within the limit prescribed by law;
that, in addition to said taxes, further provisions have been made for the payment of the debt
service requirements of the Certificates by pledging to such purpose Surplus Revenues, as
defined in the Ordinance, derived by the City from the operation of the Waterworks System; that
when so collected, such taxes and Surplus Revenues shall be appropriated to such purposes; and
that the total indebtedness of the City, including the Certificates, does not exceed any
constitutional or statutory limitation.
IN WITNESS WHEREOF, the City has caused this Certificate to be executed by the
manual or facsimile signature of the Mayor of the City and countersigned by the manual or
facsimile signature of the City Secretary, and the official seal of the City has been duly
impressed or placed in facsimile on this Certificate.
Mayor, City of Lubbock, Texas
City Secretary,
City of Lubbock, Texas
[SEAL]
(b) Form of Comptroller's Registration Certificate. The following Comptroller's
Registration Certificate may be deleted from the definitive Certificates if such certificate on the
Initial Certificate is fully executed.
OFFICE OF THE COMPTROLLER §
OF PUBLIC ACCOUNTS § REGISTER NO.
OF THE STATE OF TEXAS §
I hereby certify that there is on file and of record in my office a certificate of the Attorney
General of the State of Texas to the effect that this Certificate has been examined by him as
required by law, that he finds that it has been issued in conformity with the Constitution and laws
of the State of Texas, and that it is a valid and binding obligation of the City of Lubbock, Texas;
and that this Certificate has this day been registered by me.
Witness my hand and seal of office at Austin, Texas,
[SEAL]
HOU:3739065.1
Comptroller of Public Accounts
of the State of Texas
Exhibit A-4
(c) Form of Certificate of Paving Agent/Registrar. The following Certificate of
Paying Agent/Registrar may be deleted from the Initial Certificate if the Comptroller's
Registration Certificate appears thereon.
CERTIFICATE OF PAYING AGENT/REGISTRAR
The records of the Paying Agent/Registrar show that the Initial Certificate of this series
of Certificates was approved by the Attorney General of the State of Texas and registered by the
Comptroller of Public Accounts of the State of Texas, and that this is one of the Certificates
referred to in the within -mentioned Ordinance.
Dated:
(d) Form of Assignment.
THE BANK OF NEW YORK MELLON
TRUST COMPANY, N.A.
as Paying Agent/Registrar
I:
ASSIGNMENT
Authorized Signatory
FOR VALUE RECEIVED, the undersigned hereby sells, assigns, and transfers unto (print or
typewrite name, address and Zip Code of transferee):
(Social Security or other identifying number: ) the within Certificate
and all rights hereunder and hereby irrevocably constitutes and appoints
attorney to transfer the within Certificate on the books kept for
registration hereof, with full power of substitution in the premises.
Dated:
Signature Guaranteed By:
Authorized Signatory
NOTICE: The signature on this Assignment
must correspond with the name of the
registered owner as it appears on the face of
the within Certificate in every particular and
must be guaranteed in a manner acceptable to
the Paying Agent/Registrar.
Exhibit A-5
HOU:3739065.1
(e) The Initial Certificate shall be in the form set forth in paragraphs (a), (b) and (d)
of this Section, except for the following alterations:
(i) immediately under the name of the Certificate the headings "INTEREST
RATE" and "MATURITY DATE" shall both be completed with the words "As shown
below" and the heading "CUSIP NUMBER" shall be deleted; and
(ii) in the first paragraph of the Certificate, the words "on the Maturity Date
specified above, the sum of DOLLARS" shall be deleted and the
following will be inserted: "on February 15 in each of the years, in the principal
installments and bearing interest at the per annum rates set forth in the following
schedule:
Years Principal Installments Interest Rate
(Information to be inserted from Section 3.02 of this Ordinance)
Exhibit A-6
HOU:3739065.1
EXHIBIT B
FORM OF SPECIAL ESCROW DEPOSIT AGREEMENT
ESCROW AGREEMENT
THIS ESCROW AGREEMENT (the "Agreement"), made by and between the City of Lubbock,
Texas, a political subdivision of the State of Texas in Lubbock County, Texas, (the "City"),
acting by and through its City Council and The Bank of New York Mellon Trust Company,
N.A., as Escrow Agent together with any successor in such capacity;
WITNESSETH:
WHEREAS, pursuant to an Ordinance finally adopted on January 12, 2017 (the "Ordinance"),
the City authorized the issuance of $35,000,000 City of Lubbock, Texas Tax and Waterworks
System Surplus Revenue Certificates of Obligation, Series 2017, dated February 16, 2017, (the
"Obligations") to obtain financial assistance from the Texas Water Development Board
("TWDB") for the purpose of funding water or wastewater system improvements (the "Project");
and
WHEREAS, the Escrow Agent is a state or national bank designated by the Texas Comptroller
as a state depository institution in accordance with Texas Government Code, Chapter 404,
Subchapter C, or is a designated custodian of collateral in accordance with Texas Government
Code, Chapter 404, Subchapter D and is otherwise qualified and empowered to enter into this
Agreement, and hereby acknowledges its acceptance of the terms and provisions hereof; and
WHEREAS, a condition of the Obligations is the deposit of the proceeds of the Obligations (the
"Proceeds") in escrow subject to being withdrawn only with the approval of the Executive
Administrator or another designated representative; provided, however, the Proceeds can be
transferred to different investments so long as all parties hereto consent to such transfer;
NOW, THEREFORE, in consideration of the mutual agreements herein contained and in
consideration of the amount of fees to be paid by the City to the Escrow Agent, as set forth on
EXHIBIT A, the receipt of which is hereby acknowledged, and in order to secure the delivery of
the Obligations, the parties hereto mutually undertake, promise and agree for themselves, their
respective representatives and successors, as follows:
SECTION 1: ESCROW ACCOUNT(S). Upon the delivery of the Obligations described
above, the Proceeds identified under TWDB Commitment Number L1000549 shall be deposited
to the credit of a special escrow account or escrow subaccount maintained at the office of the
Escrow Agent on behalf of the City and the TWDB and shall not be commingled with any other
accounts or with any other proceeds or funds. The Proceeds received by the Escrow Agent under
this Agreement shall not be considered as a banking deposit by the City, and the Escrow Agent
Exhibit B-1
HOU:3739065.1
shall have no right to title with respect thereto except as Escrow Agent under the terms of this
Agreement.
The Escrow Account(s) shall be entitled "City of Lubbock, Texas, Tax and Waterworks Surplus
Revenue Certificates of Obligation, Series 2017, Texas Water Development Board Commitment
No. L1000549 Escrow Account" and shall not be subject to warrants, drafts or checks drawn by
the City but shall be disbursed or withdrawn to pay the costs of the Project for which the
Obligations were issued or other purposes in accordance with the Ordinance and solely upon
written authorization from the Executive Administrator or his/her designated representative. The
Escrow Agent shall provide to the City and to the TWDB the Escrow Account(s) bank
statements upon request.
SECTION 2: COLLATERAL. All cash deposited to the credit of such Escrow Account(s)
and any accrued interest in excess of the amounts insured by the FDIC and remaining uninvested
under the terms of this Agreement shall be continuously secured by a valid pledge of direct
obligations of the United States of America or other collateral meeting the requirements of the
Public Funds Collateral Act, Texas Government Code, Chapter 2257.
SECTION 3: INVESTMENTS. While the Proceeds are held in escrow, the Escrow Agent shall
only invest escrowed Proceeds in investments that are authorized by the Public Funds Investment
Act, Texas Government Code, Chapter 2256 (PFIA). It is the City's responsibility to direct the
Escrow Agent to invest all public funds in a manner that is consistent not only with the PFIA but
also with its own written investment policy.
SECTION 4: DISBURSEMENTS. The Escrow Agent shall not honor any disbursement from
the Escrow Account(s), or any portion thereof, unless and until it has been supplied with written
approval and consent by the Executive Administrator or his/her designated representative.
However, no written approval and consent by the Executive Administrator shall be required if
the disbursement involves transferring Proceeds from one investment to another within the
Escrow Account(s) provided that all such investments are consistent with the PFIA requirements.
SECTION 5: UNEXPENDED FUNDS. Any Proceeds remaining unexpended in the Escrow
Account(s) after completion of the Project and after the final accounting has been submitted to
and approved by the TWDB shall be disposed of pursuant to the provisions of the Ordinance.
The City shall deliver a copy of such TWDB approval of the final accounting to the Escrow
Agent together with instructions concerning the disbursement of unexpended Proceeds
hereunder. The Escrow Agent shall have no obligation to ensure that such unexpended Proceeds
are used as required by the provisions of the Ordinance, that being the sole obligation of the City.
SECTION 6: CERTIFICATIONS. The Escrow Agent shall be authorized to accept and rely
upon the certifications and documents furnished to the Escrow Agent by the City and shall not be
liable for the payment of any funds made in reliance in good faith upon such certifications or
other documents or approvals, as herein recited.
SECTION 7: LIABILITY OF ESCROW AGENT. To the extent permitted by law, the
Escrow Agent shall not be liable for any act done or step taken or omitted by it or any mistake of
Exhibit B-2
HOU:3739065.1
fact or law, except for its negligence or default or failure in the performance of any obligation
imposed upon it hereunder. The Escrow Agent shall not be responsible in any manner for any
proceedings in connection with the Obligations or any recitation contained in the Obligations.
SECTION 8: RECORDS. The Escrow Agent will keep complete and correct books of record
and account relating to the receipts, disbursements, allocations and application of the money
deposited to the Escrow Account, and investments of the Escrow Account and all proceeds
thereof. The records shall be available for inspection and copying at reasonable hours and under
reasonable conditions by the City and the TWDB.
SECTION 9: MERGER/CONSOLIDATION. In the event that the Escrow Agent merges or
consolidates with another bank or sells or transfers substantially all of its assets or corporate trust
business, then the successor bank shall be the successor Escrow Agent without the necessity of
further action as long as the successor bank is a state or national bank designated by the Texas
Comptroller as a state depository institution in accordance with Texas Government Code,
Chapter 404, Subchapter C, or is a designated custodian of collateral in accordance with Texas
Government Code Chapter 404, Subchapter D. The Escrow Agent must provide the TWDB with
written notification within 30 days of acceptance of the merger, consolidation, or transfer. If the
merger, consolidation or other transfer has occurred between state banks, the newly -created
entity shall forward the certificate of merger or exchange issued by the Texas Department of
Banking as well as the statement filed with the pertinent chartering authority, if applicable, to the
TWDB within five business days following such merger, consolidation or exchange.
SECTION 10: AMENDMENTS. This Agreement may be amended from time to time as
necessary with the written consent of the City and the TWDB, but no such amendments shall
increase the liabilities or responsibilities or diminish the rights of the Escrow Agent without its
consent.
SECTION 11: TERMINATION. In the event that this Agreement is terminated by either the
City or by the Escrow Agent, the Escrow Agent must report said termination in writing to the
TWDB within five business days of such termination. The City is responsible for ensuring that
the following criteria are satisfied in selecting the successor escrow agent and notifying the
TWDB of the change in escrow agents: (a) the successor escrow agent must be an FDIC -insured
state or national bank designated by the Texas Comptroller as a state depository; (b) the
successor escrow agent must be retained prior to or at the time of the termination; (c) an escrow
agreement must be executed by and between the City and the successor escrow agent and must
contain the same or substantially similar terms and conditions as are present in this Agreement;
and (d) the City must forward a copy of the executed escrow agreement with the successor
escrow agent within five business days of said termination. No funds shall be released by the
TWDB until it has received, reviewed and approved the escrow agreement with the successor
escrow agent. If the City has not appointed a successor escrow agent within thirty (30) days of
the notice of termination, the Escrow Agent may petition any court of competent jurisdiction in
Texas for the appointment of a successor escrow agent or for other appropriate relief, and any
such resulting appointment shall be binding upon the City. Whether appointed by the City or a
court, the successor escrow agent and escrow agreement must be approved by the TWDB for the
appointment to be effective. The Escrow Agent is responsible for performance under this
Exhibit B-3
HOU:3739065.1
Agreement until a successor has been approved by the TWDB and has signed an acceptable
escrow agreement.
SECTION 12: EXPIRATION. This Agreement shall expire upon final transfer of the funds in
the Escrow Account(s) to the City.
SECTION 13: POINT OF CONTACT. The points of contact for the Escrow Agent and the
TWDB are as follows:
The Bank of New York Mellon
Trust Company, N.A.
2001 Bryan Street, 10th Floor
Dallas, Texas 75201
(214) 468-6254
(214) 468-6322
ntichelle.baidwin@bnymellon.com
Executive Administrator
Texas Water Development Board
1700 North Congress Avenue
Austin, Texas 78701
SECTION 14: CHOICE OF LAW. This Agreement shall be governed exclusively by the
applicable laws of the State of Texas. Venue for disputes shall be in the District Court of Travis
County, Texas.
SECTION 15: ASSIGNABILITY. This Agreement shall not be assignable by the parties
hereto, in whole or in part, and any attempted assignment shall be void and of no force and
effect.
SECTION 16: ENTIRE AGREEMENT. This Agreement evidences the entire Escrow
Agreement between the Escrow Agent and the City and supersedes any other agreements,
whether oral or written, between the parties regarding the Proceeds or the Escrow Account(s).
No modification or amendment of this Agreement shall be valid unless the same is in writing and
is signed by the City and consented to by the Escrow Agent and the TWDB.
SECTION 17: VALIDITY OF PROVISIONS. If any term, covenant, condition or provision
of this Agreement is held by a court of competent jurisdiction to be invalid, void or
unenforceable, the remainder of the provisions shall remain in full force and effect and shall in
no way be affected, impaired or invalidated thereby.
SECTION 18: COMPENSATION FOR ESCROW SERVICES. The Escrow Agent shall be
entitled to compensation for its services as stated in Exhibit A, which compensation shall be paid
by the City but may not be paid directly from the Escrow Account(s).
Exhibit B-4
HOU:3739065.1
IN WITNESS WHEREOF, the parties hereto have executed this Agreement effective upon
signature of both parties.
CITY OF LUBBOCK, TEXAS
Authorized Representative
Date:
CITY OF LUBBOCK, TEXAS
Address:
1625 13th Street
Lubbock, Texas 79457
(Seal)
THE BANK OF NEW YORK MELLON TRUST
COMPANY, N.A.,
as Escrow Agent
By:
Title:
Date:
Address:
2001 Bryan Street, 10th Floor
Dallas, Texas 75201
(Bank Seal)
Exhibit B-5
HOU:3739065.1
EXHIBIT A
Fee Schedule
Exhibit B-6
HOU:3739065.1
EXHIBIT C
DESCRIPTION OF ANNUAL DISCLOSURE OF FINANCIAL INFORMATION*
The following information is referred to in Article XII of this Ordinance. As used herein,
the term "Official Statement" means the Official Statement for the City's Tax and Waterworks
System Surplus Revenue Certificates of Obligation, Series 2016.
Annual Financial Statements and Operating Data
The financial information and operating data with respect to the City to be provided
annually in accordance with such Section are as specified (and included in the Appendix or other
headings of the Official Statement referred to) below:
1. The portions of the financial statements of the City appended to the Official
Statement as APPENDIX B, but for the most recently concluded fiscal year.
2. Statistical and financial data set forth in the Official Statement in
"APPENDIX A - FINANCIAL INFORMATION REGARDING THE CITY" (Tables 1-5 and 7-
17).
Accounting Principles
The accounting principles referred to in such Section are the accounting principles
described in the notes to the financial statements referred to in Paragraph 1 above.
Exhibit C-1
HOU:3739065.1
PRESENTED, FINALLY PASSED AND APPROVED, AND EFFECTIVE on the 12th
day of January, 2017, at a regular meeting of the City Council of the City of Lubbock, Texas.
(X"
DAN POPE, Mayo
ATTEST:
CA GARZA, City
[SEAL]
APPROVED AS TO CONTENT:
By:. 'A' L'W_611
4INDA CUELLAR, Acting Executive Director of Finance
APPROVED AS TO FORM:
By:
JERRY . KYLE, Jr., Bond Counsel
Signature Page for Ordinance
HOU.3739065 I